Prosecutors allege a years-long scheme diverted subsidized diesel through shell companies, leaving the State with massive losses.

Arrests and early court decisions

An investigation into alleged money laundering and tax evasion linked to Ecuador’s fuel subsidy system escalated on February 10, 2026, with the arrest of Guayaquil mayor Aquiles Álvarez and ten other people. The case, known as Goleada, centers on claims that a coordinated network manipulated fuel purchases, accounting records, and corporate structures to conceal illicit profits.

That morning, prosecutors and police carried out raids across Guayas province, including at the mayor’s residence. Authorities reported seizing cell phones, computers, digital storage devices, cash, and documents. All eleven suspects were transferred to Quito for arraignment at the North Judicial Complex on February 11th. A judge ordered pretrial detention for six defendants and imposed alternative measures—such as periodic reporting and travel restrictions—on the remaining five. No verdict has been issued; the case remains at an initial stage.

What prosecutors say they are investigating

According to the Prosecutor’s Office, the alleged scheme operated continuously since 2020 and fits the legal definition of organized crime: a structured association of individuals working together to commit crimes for financial gain. Investigators say the structure served two primary offenses. The first is money laundering—attempts to disguise the origin of illicit funds. The second is tax evasion—alleged deception of the State to reduce or avoid tax obligations.

Prosecutors contend the network’s activities produced millions in illicit profits while generating an estimated $100 million loss to public finances.

How the alleged scheme worked

At the center of the case are two companies prosecutors describe as pivotal to the operation. One is Ternape Petroleum SA Shipping Terminal, which trades petroleum and derivatives and supplies fuel—mainly diesel—to the shipping sector. The other is Flonape Overseas SA, a Panama-registered shipping company domiciled in Guayaquil that investigators allege functioned as a shell entity.

The prosecution’s theory holds that Ternape purchased subsidized diesel from the Ecuadorian government under the justification that it would supply the national shipping industry. Instead, investigators allege, the fuel was resold to international vessels at non-subsidized, market prices. The spread between the subsidized and international prices allegedly generated the illicit gains.

To legitimize those revenues, prosecutors say the companies recorded fictitious intercompany debts among entities controlled by the same owners. While authorities have not detailed the precise accounting entries, they suggest balance sheets were manipulated so that excess revenue was booked as liabilities—debts owed to Flonape—rather than as profits. By inflating liabilities and reducing apparent assets, year-end accounts would show little or no surplus, muting tax liabilities and avoiding scrutiny.

Investigators further allege that Flonape later redirected the supposed debt so it would be paid not to the company, but directly to two partners—$800,000 earmarked for Aquiles Álvarez and $1.9 million for his brother Antonio. That money, prosecutors say, was never actually transferred; it remained in Ternape’s accounts and was recorded as increased capital, further masking its origin.

Beyond the corporate core, the alleged structure included collaborators responsible for contacting international vessels, coordinating logistics, and managing documentation needed to divert fuel and bypass controls.

Who faces charges

Those placed in pretrial detention include:

• Aquiles Álvarez, mayor of Guayaquil.
• Antonio José Álvarez Henríques, director of Barcelona Sporting Club and the mayor’s brother.
• Xavier Mario Álvarez Henríques, also a Barcelona Sporting Club director and the mayor’s brother.
• César Emilio Bravo Ibáñez, legal representative of Fuelcorp, which operates service stations and markets fuels.
• Fernando Patricio Peñaherrera Venegas, representative of Ternape Petroleum.

Subject to alternative measures are:

• Pedro Juan Hidalgo Elinan, the mayor’s uncle and general manager and legal representative of Pesca Barva SA.
• Pablo Ricardo Pita Rendón, former general manager of the Guayaquil Airport Authority.
• Carlos Andrés Asanza Colmont, general manager of the Guayaquil Land Terminal Foundation.
• David Andrés Álvarez Kronfle, cousin of the mayor and president of the Barcelona SC Football Commission.
• Ricardo Fabio Bruzzone Puig and Gastón Aparicio Loy Correa, both cited by prosecutors as collaborators, with the latter allegedly handling fuel-related documentation.

Next steps in the case

The investigation has entered its preliminary phase, during which prosecutors are collecting expert analyses, testimony, and documentary evidence to determine whether the case should advance to trial. If investigators conclude the evidence is insufficient, they may seek dismissal.

Meanwhile, the legal status of those in custody is under review. On February 13th, defense attorney Ramiro García announced that a court agreed to process an appeal against the pretrial detention orders. The review hearing is scheduled for March 2, 2026, when a panel of the Provincial Court of Pichincha will decide whether to uphold the detentions, replace them with alternative measures, or lift them entirely.